Understanding Exports & GST in Australia: Our Guide
Goods and Services Tax (GST) is a value-added tax paid for goods and services sold for domestic consumption. Typically, it is paid by the consumers when they buy products or get some services from businesses. However, it is remitted to the government by the companies selling the goods or services.
At the same time, have you ever wondered if GST covers goods or services exported out of the country? In this article, we'll share with you the correlation between GST and exports in Australia.
GST in Australia
Australia requires a ten per cent tax on goods and services purchased and consumed. It is an indirect sales tax where businesses are required to add GST to their products' prices, and the customers who buy those products end up paying for the tax. It is then collected by the government after the companies or businesses forward the funds. However, keep in mind that this particular tax usually applies to imported goods or services, and it is a different matter when it comes to exported items.
Exports and GST in Australia
As a business, it's essential to understand that the exports of goods and services from Australia are GST-free for the most part. This means that once registered for GST, you don't have to include this tax in the price of your exports, and you can even claim credits for the GST included in the price of purchases used for exporting goods or services.
Yet, keep in mind the free GST for exported goods applies within 60 days of the first of two circumstances. One, the supplier issues an invoice for the goods, and two, the supplier receives any payment for the goods. If these products are settled on an instalment basis, the final instalment will be considered the payment or invoice.
Exported goods of special circumstances and how GST applies
Now, let's look at some special circumstances of exported goods in Australia and see how GST applies. Take note of the following:
Private recreational boats: There is a special rule that applies to new boats for personal recreational uses. You can sell or purchase a new recreational boat GST-free if it is exported from Australia within 12 months.
Non-physical products: Free GST doesn't only apply to physical goods or products being exported. As a business owner, you must know that it applies to non-physical things, such as services, financial supplies, various rights, and other professional services.
Exported goods for Australian tourists: Free GST also applies to foreigners or Australian tourists exporting goods through a refund. This means that if you take goods out of the country as accompanied luggage, you can seek a refund for the tax included during the purchase. However, they must be worn or carried during travel and checked into the hold of the aircraft or ship.
At this point, we've learned how exported goods or services in Australia become GST-free. To that end, be sure to consider all the valuable information discussed above. As a business owner, be sure to work with a highly reliable business accountant who can assist you with your business’ tax matters and financial management. We hope the information shared has shed some light on what you need to know about the correlation between exports and GST in Australia.
As an accounting firm on the Gold Coast, we help clients and businesses manage their finances by increasing profits and reducing taxes. If you're looking for professional business accountants to help you deal with your exported products and GST, get in touch with us today to see how we can help!